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Law is a Buyer’s Market: Building a Client-First Law Firm ~ Reviewed

Law is a Buyers Market - Building a Client-First Law Firm ReviewedReading the introduction to ‘Law is a Buyer’s Market – Building a Client-First Law Firm’ by Jordan Furlong I began to wonder whether I should simply stop reading and leave it at that.

This is because Jordan warns the reader that he has narrowed down the focus of his book. He was not writing for “NewLaw” competitors to the legal profession. I’m in the NewLaw camp. He “would not address lawyers in sole practice or smaller firms” (which for present purposes Jordan defined as practices with fewer than ten lawyers). I’m technically a sole practitioner and also have just under the ten lawyer threshold set by Jordan in my practice. He also restricts his geographical ambit to North America. So Nova Scotia is included but old Scotland, where I hail from, is not.

However, I decided to persevere as Jordon reckoned that even lawyers like me “can find value here as well”.

Jordan states that his intention is to describe “why the market for legal services has irrevocably changed and how traditional law firms, finding their old practices and procedures no longer effective, can change with it.”

His book, he tells us, “is meant for lawyers, in a way” but “it’s not really about lawyers or law firms it’s about the people and families and businesses that consult lawyers and retain law firms and thereby enter the legal market willingly or otherwise.”

We are reminded that, as Richard Susskind observed, the law does not exist to provide a living for lawyers.

Serving your clients, Jordan tells us, is your North Star. If you follow it he promises that you will not go astray.

Jordan expertly guides us through why the market for legal services has changed in recent times from a seller’s market to a buyer’s market. Factors include technology, the internet, globalisation, regulation, competition and empowerment of buyers. But one over-arching factor that Jordan says should be taken into account was the Great Financial Crisis of 2007-2008.

Then Jordan explores the emergence of lawyer substitutes and the development of law firm substitutes. The result being that lawyers and law firms are no longer the exclusive suppliers of legal services.

However, Jordan’s list of lawyer substitutes would not fill me with much fear in the more regulated (from the lawyers ‘only’ point of view) jurisdictions of Canada and the USA. He acknowledges that these ‘subsitutes’ such as licenced independent paralegals in Ontario are really not competing with but fulfilling a role that traditional lawyers aren’t interested in fullfilling.

Jordan includes various legal technologies in a list of pragmatic substitutes for lawyers. But to my mind (other than perhaps LegalZoom and Rocket Lawyer who possibly have had more impact in the States than they have so far at this side of the pond) the ‘subsitutes’ mentioned are simply tools that any lawyer can employ to assist and make themselves more competitive. As indeed my own law firm, Inksters, has done with legal process improvement. As usual I raise my eyebrows at the mention of legal artificial intelligence being a real threat just now as a viable lawyer substitute.

Jordan does, however, fully recognise that lawyers can adopt these technologies to improve their own productivity.

On law firm substitutes we are pointed to examples such as legal process outsourcing (that has perhaps not faired as well as anticipated), flex-lawyer platforms such as Axiom and Lawyers on Demand, the Big Four accountancy firms and ‘NewLaw’ firms such as Radiant Law and Riverview Law (although I was surprised to see OldLaw behemoth Eversheds on Jordan’s list of examples and where does Riverview Law now fit in, I wonder, following it being acquired by Big Four accountancy firm Ernst & Young?).

As Jordan clearly puts it:-

These law firm substitutes have identified the market gap of inefficient, overpriced law firm services, and they’re exploiting it. They’re revealing a dangerous truth to legal service buyers: You can obtain the solutions you need without the overhead costs of the bloated, inefficient law firms that have been doing your work the same archaic way for decades.

This is the real threat to the traditional law firm model. Not only are these substitutes taking work from firms, they’re also transforming that work in the process, making it lighter, faster, more easily tracked, and more accurately measurable.

The last book review I did on this blog was of a book by Jordan’s fellow countryman Mitch Kowalski entitled ‘The Great Legal Reformation: Notes from the Field’. Do read that book for an indepth look at some of these law firm substitutes including, of course, my own law firm, Inksters.

Next Jordan looks at the fall of the traditional law firm. He does so with what seems at first the old analogy about dinosaurs. Is it going to be that old chestnut adapt or die? Not quite. Jordan points out that climate change killed off the dinosaurs. He elaborates:-

Law firms are like dinosaurs. The business climate in which they evolved is changing radically and permanently – and I think they are in serious trouble as a result.

Jordan paints the picture of a traditional law firm and all its known hallmarks. He then tells us why the legal market sees things differently and wants things done in a different way. As Jordan sums it up:-

Efficient, buyer-focused, innovative platforms are exactly what the legal market is now seeking, and it’s finding them in growing numbers. The traditional law firm is constitutionally unable to compete in, let alone dominate, the new legal market. Something will have to replace it.

Jordan then plans to outline what he thinks a new law firm model should look like. But first he addresses what he thinks “is the most fundamental issue facing law firms over the next 10 to 15 years: the steadily diminishing role that lawyers will play in creating and delivering services to clients”.

There is an assumption that you need lawyers to have a law firm. But Jordan reckons that over the next 10 to 15 years this is going to change and “lawyers will no longer be considered essential to law firms’ ability to deliver legal services”.

He gives examples of where this is already happening (although signing a deal to use AI legal tech and actually leveraging its usage may be two different things). No examples are given of straightforward Legal Process Engineering which is an area I believe all law firms should concentrate their energies on before they get caught up in the current hype surrounding AI or blockchain.

Jordon refers to technology-powered products and services as being “productivity engines”. These “enhance the user’s ability to complete a task or reach a solution while reducing the amount of time and money required to achieve that goal”.

Jordan says that today “lawyers generate more than 99 percent of a law firm’s revenue”. I would argue that this would have been the case in the past but is perhaps a higher figure than reality in many law firms today where “non-lawyers” (a term Jordan does not like but still uses for distinguishing purposes) are often fee earners.

But Jordan reckons that “once productivity engines are ubiquitous in law firms, that percentage could conceivably drop below 50 percent”.

What should be borne on mind, but is not necessarily highlighted by Jordan, is that productivity engines have been available to lawyers for many years. Over 20 years ago case management systems were available that could, if employed properly, enhance workflows and productivity.

That lawyers on the whole didn’t employ them in any meaningful way was perhaps a symptom of the billable hour and there being no compelling reason to do so. But as Jordan points out the climate is changing which is perhaps why such tools are receiving more promenance today than they did yesterday. But do remember many of these tools are not new even if the vendors have added an ‘AI’ tag to them (and if they have it may not really be AI and you probably don’t really need AI in most productivity engines in any event).

We are walked by Jordan through a “lawyer-proof” law firm of the future: “firms that don’t rise and fall, as traditional law firms did, with the actions and fortunes of individual lawyers”.

Then Jordan considers how you should understand and act upon the coming “inessentiality” of lawyers. This involves building systems that can meet the market needs of its clients. Those systems must be effective. It matters not whether the people who operate them come with a law degree.

I liked the line “you must think of your law firm as a business entity that helps buyers overcome legal challenges and meet legal opportunities – not as a hotel for lawyers, which is the description to which most law firms answer today”.

Having shown us that in his view (one shared by many including me) the traditional law firm model is no longer sustainable Jordan then turns his attention to “what a new, better, more market-appropriate law firm business model looks like”. This Jordan refers to as the “post-asteroid” law firm.

Jordan considers the question “why do law firms even exist?”. He compares a traditional law firm’s characteristics with those of a typical corporation. The full analysis he gives is well worth studying with a view to making your law firm standards more akin to those of a corporation.

Unlike a corporation, where “the best interests of the company” are paramount, the typical law firm ‘makes decisions’ that are “based on what a small number of its most powerful equity partners consider to be in their own interests”.

The switch from this old style of management to a more corporate one has happened in NewLaw firms as clearly highlighted again and again in the real life examples given by Mitch Kowalski in ‘The Great Legal Reformation: Notes from the Field’.

I liked the game Jordon plays in giving examples of well known businesses and their purpose and then asking you to state your own law firm’s purpose. Having done so he runs through some examples of how lawyers might state their law firm’s purpose before offering what he feels that purpose really should be. I was glad that my thinking on this was in line with his. Do play the game in the book and see how well you fair.

Jordan examines whether law is a business or a profession and concludes that “obviously, it’s both”. It is “a commercial business that deals in professional services”.

He looks at how a law firm should choose its markets and identify the clients it wants to serve. This includes identifying characteristics of “good clients” that you will want to keep and nurture. Jordan doesn’t mention sacking clients. I have read elsewhere that lawyers should sack at least one bad client every week and concentrate only on having good clients. Most will seldom ever fire a client and will put up with the consequences of having bad clients on their books.

Next up is creating a strategy to fulfil your law firm’s purpose. At this point I had to google “Pensacola”! You will have to read Chapter 9 to understand why. You will also in that chapter read an amusing analogy concerning law firm strategic planning and a duck-hunting expedition.

Moving on to look at client strategy Jordan recounts the Black & Decker story (a favourite one amongst legal futurists). This emphasises what the customer really wants. Jordan reveals what a lawyer’s client really wants and how that shapes your client strategy.

The importance of the client experience is emphasised: “Your firm, in the eyes of the market, is defined not by who and what you say you are, but by who you actually are and what you actually do”.

Jordan considers that competitiveness starts with how a law firm does its work – its internal operations and workflow. A topic close to my heart. He states that “few law firms have yet developed the position of Chief Workflow Officer”. At Inksters we did, of course, coin the title of “Legal Process Engineer”: one that has been picked up and used by others since.

The importance of pricing and distinctiveness is also covered as cornerstones of a law firm’s competitive strategy. Again music to my ears. At Inksters our first strapline was “Just that little bit different” and we have always striven to stand out from the same old same old.

The importance of culture within a law firm is examined by Jordan. Drawing from research carried out on lawyers’ personality traits, Jordan concludes that “lawyers tend to be intense, critical, and easily frustrated short-term thinkers who don’t like dealing with other people or taking direction from them. The law firms that lawyers create, own, and operate in their image are not usually delightful workplaces.” Jordan adds a footnote to that: “Throw in lawyers’ deeply entrenched tendency to view themselves as superior to the “non lawyers”  who work for them, and you exacerbate the problem”.

Thankfully, Jordan guides you through what you need to do to change that culture. On that journey you will learn about the “one-firm” firm, culture in the community and generational change (the impact that Millennials are making and will make on your law firm). You will also learn Jordan’s views on the behaviours to encourage and those to have a zero-tolerance towards in order to create a  perfect culture. Compensation should recognise “the multi-dimensional nature of success in a law firm”. Diversity is also an important aspect in all of this.

The role of Associate and Partner are looked at by Jordan as a dying breed. We learn why these roles first existed but how now they no longer need to. Although clearly some lawyers will hanker after the perceived power and prestige that the title supposedly brings, whilst many others realise the burden it can actually be.

Jordan states:

Firms will eventually recognise that “partner” and “associate” are words that no longer convey much meaning, either internally or externally, when it comes to their lawyers. The important step will be for firms to shake themselves free of the legacy burdens of these old job descriptions and to start re-visualising the myriad ways in which lawyers, regardless of their capacity and experience, can add real value to the firms and their clients. That’s the structural and organizational reality for which your firm should start preparing now.

I’m glad to say that I started preparing for this at Inksters a good few years ago now. For how my law firm’s model works without partners or associates see chapter 10 of ‘The Great Legal Reformation: Notes from the Field’ by Mitch Kowalski.

So all this change requires change management from the law firm leader(s). Tell me about it!

As Jordan puts it “changing a law firm can be an undertaking of Kiliminjaro-esque proportions”.

Jordan outlines why lawyers are particularly change averse but gives some tips on how you might turn this around. He also advises you to hold your ground and see change through even if there are casualties along the way. People will leave as a result of change they can’t cope with but invariably your firm will end up better off as a result.

In the final chapter Jordan highlights what a buyer’s market in law means for you. He stresses that:-

From now on, everything that law firms do, plan, price, sell, perform, and compensate has to be geared not towards themselves or their lawyers, but towards the buyers of their services.

Lawyers need to adapt. He doesn’t quite go as far as to say adapt or die. Others have. But perhaps that is implied.

If, having read the foregoing review, you fear the death of your law firm then buying, reading and acting upon Jordan’s advice is the best first step you can take to help cure the ills that might lead to such a death.

At the beginning of this review I pointed out that Jordan was not writing for “NewLaw” competitors to the legal profession nor law firms with fewer than ten lawyers. He also restricted his geographical ambit to North America.

I think Jordan did himself a disservice by claiming these restrictions. I can assure you that his book is just as relevant for those in NewLaw and/or small law firms and/or outwith North America.

As a NewLaw, small law firm proprietor based outwith North America who has been undertaking significant change in his law firm I could empathise with much that Jordan writes about. But I could also see that there is much more still to do. We are always on a journey and Jordan’s book will certainly guide you in the right direction.

You can buy ‘Law is a Buyer’s Market – Building a Client-First Law Firm’ by Jordan Furlong online from Law21. Be prepared to pay post & packing from Canada but don’t let that put you off. The added expense is well worth it. Or if you are happy with just a Kindle e-book (I wouldn’t be) then you can purchase that on Amazon. This is the UK link. If you live outside the UK then do go to your local Amazon site.

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